Luxury apartments in Singapore and other major cities see rent surge

SINGAPORE: Rent for luxury apartments in some of the world’s biggest cities see a sudden upward trend, likely caused by limited supply and buyers looking to acquire after the pandemic.

Prime residential rents, defined as the top 5 per cent of the market, rose 7.9 per cent year over year on average in the 12 months till September, according to real estate company Knight Frank, which tracks 10 global cities. In Singapore, prime rents were up 14.5 per cent compared to last year, while the gain was 11.2 per cent in London. Singapore was, however, behind only Sydney among the 10 cities that Knight Frank tracked in terms of annual rental changes.

Despite the increase, signs point to a downward trend just around the corner. In the third quarter of the year, rent on prime properties in Singapore dropped 1.7 per cent, according to Knight Frank. The company said it also sees the rate of increases slowing globally in the coming months as tenants reach their affordability limits.

Christine Li, head of research, Asia-Pacific at Knight Frank, said, “The higher rental rates are currently undergoing a normalisation phase against the backdrop of slower economic growth”. About 9,000 private residential units were completed in the third quarter, the highest new supply tally in a quarter since the second quarter of 2016, Li said. For the whole of 2023, about 20,400 private residential units are expected to be completed, the highest annual completion since 2017, she added. /TISG